I’ve wanted to write down some thoughts for quite a while on the news of the fitbit acquisition by google, the current state of play with the Apple watch and how, in my opinion, with the right set up and investment fit bit can be transformed and put the Apple watch to bed.
This seems quite prescient given that today is the Apple watches 5th birthday and this week my Apple watch app Stretchy reached 3000 downloads (been out for 3 weeks).
Full disclosure - from a consumer side I am a 99% Apple watch fan boy. For those of you that know me well, you’ll know I bet the house on the Apple watch in 2018 with my last startup Flex which only functioned if you had an Apple watch.
If you want to know more on Flex, fitness technology and how I see it - stay tuned.
Pre COVID19, but now more than ever I find myself telling the same story and giving the same advice to founders across the globe who are interested in building fitness technology products and I can feel a monster essay coming on how to evaluate the market and find opportunities.
After more than a year since I left, it feels right.
Well isn’t it about time. Every new release from Fitbit feels like I’ve been watching a fish flap around on the ground who just won’t die.
After going public at $30 a share in 2015 and peaking at $47 a month later, Fitbit has been on a long rolling slow decline, averaging to below $7 a share from December 2016 onwards.
What was once heralded as the pill to make humanity healthier with an inbuilt heart rate monitor that was ~30% inaccurate and a made up 10,000 steps a day metric was stored away in my mind at least with a number of other one hit wonder tech companies like Groupon and Blue Apron to gather dust and make great punching bags for essays that nobody reads.
Before the acquisition it was the distressed asset that could be so much more. If my Apple watch has taught me anything it is that wearables can change the way we interact with the world if the right product is shipped to the right person. All it would need is a new vision, investment and a new owner to give it super-powered distribution.
A position that I shared with a friend of mine in March of 2019. That Google needs to get in the game and is starting from behind, it should buy FitBit, retool and rebuild it and give customers great wearable products that are ubiquitous with the rest of our services.
In November of 2019 it was announced that Google was (pending approval) going to acquire Fitbit at $7.35 a share, up from where it traded at $4.31 a share.
That did strike me as a ridiculous premium (+70% in fact) to pay for control. A price that I justified away with the scale of the upside, that the economy was humming and the stock markets were on fire. A recession didn’t seem plausible.
It later came out that Facebook had been making successive bids for Fitbit, with an ever increasing price and Google swooped in with an offer $0.05 higher per share than Facebook’s final offer.
So Google is making a play for our wrists. I have some thoughts on how they can win.
I’ll go deeper into this later on, but just know that the way we think of wearables is broken because we’ve only been exposed to what they have done so far not what they can do.
Apple Watch - The King
Let’s start by setting the state of play. If you are one of the naive souls who clings to your fitbit and says you don’t ever want an Apple watch, good for you. I don’t believe you. Do you even believe yourself?
There is a misunderstanding amongst consumers that these two are comparable competitors at present so let’s set the scene on how the industry looks today:
Apple watches in use: ~80 million
Fitbit smart watches in use: ~15 million
Does that make sense to you? Think about it, when you’ve gone for a run, or a ride or a walk, or when we were in offices - how many people have you seen wearing a Fitbit smartwatch? I’mma say no.
The average resale value (2nd hand sellers) of an Apple watch is around $320 and for a fitbit it is $110. This might be a badly made point as Apple watches start higher in price, but overall it feels like they retain value much longer.
So for the purposes of this essay going forward, we have to start from the place that:
In fact when I started flirting with the idea of building an Apple watch app I set out 3 key points:
No other wearable platform comes close from a total distribution standpoint and so it was a no brainer to start with Apple.
Final anecdotal piece on this battle. My wife's Fitbit gathered dust in a drawer until it disappeared, the Apple watch that I got her is on her wrist every day.
How Can You Win?
The tweet below by Paul Graham is one of my all time favourites. I’ve shown it to co-founders, mentors, advisors and people who ask me for help. When you take on a big thing, start small and then go wide.
Find the edge dislocation sharp enough that a customer will allow you into their lives. (I go into detail somewhat in my post on 10x product maths)
I should frame this.
It would be easy to have looked at the stock price, looked at the Apple watch and said this game was over but let me tell you. It is only just beginning.
Are there flaws in the Apple watch? Oh yes.
Take a moment and think, how many times has someone you known with an Apple watch told you about an Apple watch app they’re using?
Maybe a handful?
Can you guess how many Apple watch apps have every been made for the watch?
Over 35,000 apps. That is millions of hours of design, and development, and management and marketing to make and launch 35,000 apps for the watch.
Well guess what - right now there are only just over 9,000 Apple watch apps live and available for your Apple watch.
That’s right, ~26,000 Apple watch apps have been deprecated and removed from the app store since the Apple watches inception. That is an insane amount of wasted energy.
Why is that?
Well, that is because of 2 main things:
Developing an Apple watch app is not easy
Distributing an Apple watch app is nearly impossible
Through stretchy and my other Apple watch projects I’ve spoken to people at Apple. They know these are issues, but they just are not priorities for them.
Developing an Apple watch app is not easy
While 80 million users and 35,000 apps may sound like a lot, it’s drop in the bucket compared to the phone and iOS app counts, and so it then makes some sense that the infrastructure to build on WatchOS is very underdeveloped.
Furthermore the documentation of how to build for WatchOS is extremely light and only really covers the basics. I remember with Flex, we had to hack the crap out of the watch to get it to do what we wanted and even that was considered simple from a feature complexity standpoint.
Up until this week we have been unable to find any analytics package that runs on the watch. That means that we can count downloads, but there is no way of telling if someone is using certain features correctly or at all.
One of the most basic foundations of building technology products is non existent. (We have discovered an experimental package that may work. But after 5 years of watches this is incredibly late).
The world is moving to low/no code tools - these don’t exist for the Apple watch either. (Pretty solid market opportunity here if you’re looking for a product to build - see the below points first though)
Distributing an Apple watch app is nearly impossible.
This isn’t an old man shouting at the clouds statement. We could have shipped different products at Flex that were more successful I maintain that POV and it is clearly proven by Future. It would be naive however to think that a better product will just win. Distribution is foundational.
At present you cannot select “has/wears Apple watch” as a targeting criteria on any ad platform in the world. Nada. You can guess the audience on Facebook by saying someone is “interested in Apple Watch”, but no direct targeting making ads a literal spray and pray.
The best concentration of Apple watch users we found was on the /r/applewatch channel on reddit which numbers at 250k subscribers. Still a drop in the bucket compared to all the watches in circulation.
At the time of writing this, Apple has now fully moved the Apple watch app store onto the watch in line with their appstore + platform product policy but let’s be real - navigating 9000 apps on an inch by inch screen is ridiculous. Before it was moved to the watch, users still struggled to find the apps they needed and discover new apps when the store was on the phone. Ask an Apple watch wearer to guess how many apps there are - I always get back a number near 300.
In fact the App Store issue is so bad, teams of people have scraped Apple and made independent app stores of their own like bestapplewatchapps.com and the now defunct watchaware.com
Why Does Any Of This Matter?
It would be easy to conclude that watch products would be more successful if anyone really needed them, that apps would be more successful if anybody wanted them and that this whole topic is to niche for anyone to invest in.
In fact I think it would be so easy to come to those conclusions it is borderline lazy. I don’t say that lightly, having had this discussion with family members and having accused them of such lazy thinking.
[Feel free to skip this section - the next section I make my recommendations for how google can create feature parity and beyond]
We design and build ever more overcomplicated devices, apps and notifications with dings and buzzes which leave us indescriminantly distracted with fragmented focus in our daily lives. People for the most part are enslaved to their phones.
What wearables, smart watches in particular allow are for us to be directly connected to information 24/7. No dings or huge buzzes needed, the device is literally against your skin for up to 24 hours of the day.
Smart watches with an app platform can allow for a trillion apps that fit a trillion use cases we as individuals need to solve the problems in our daily lives. The use of soft touch, customised haptics is the communication channel these devices give to us that is under leveraged it hurts to see.
There is real frustration here, when I look at my Apple watch my throat tightens trying to articulate how much potential I see for this thing that it isn’t being used for yet.
Let’s run through a handful of scenarios an Apple watch could be used to make our lives easier:
Oil rig worker safety
Long stint, hard weather work can wear down on mental accuracy and physical wellness. Avoidable accidents on oil rigs cost millions of dollars every year. Real time heart rate and motion data from the Apple watch could flag employees at risk of making mistakes through exhaustion.
Elderly parent Alarms
Caring remotely for your elderly parents is tricky. You could set a custom haptic notification on the watch to fire when their ring activates or when their home/smoke alarm is tripped.
10 minute meeting notices on google calendar are nice but we all still miss the start of most meetings. A simple soft and unique notification sequence could give you a countdown of nudges from 1 minute out so that you’re ready on time and not distracted.
Covid19 risk warning
My team is already been engaged by a third party on this one. Heart rate and sleep pattern monitoring can flag early diagnostic signals that show up when you are otherwise asymptomatic that you are highly likely to be sick. If used in conjunction with contact tracing and exposure tracking this could significantly decrease the time and resources needed to get every potential exposure tested.
"Okay Google" - An Action Plan
Okay google, if you’re reading this. Here is the roadmap/action plan for your PMs to make the Fitbit smart watches competitive and then killer.
Things to put you on par with the Apple Watch
Things to make you killer
I’ve seen people pick up a pixel phone and never go back to the church of Appletology. Mac books too.
The path is simple, make it accurate, make it easy and make it open.
This $2billion bet could easily be a $20billion cash cow with a little work.
If there’s anyone to who can make a dent in the lead that the Apple watch has it is Google.
We’re counting on you Google, don’t screw it up.